While the market is working well for
consumers who have protection insurance, millions of people
remain unprotected. Around 58% of adults have no life insurance,
critical illness cover or income protection and 59% of that group
has never considered it. This means that millions could be left
vulnerable in the event of a death in the family, serious illness
or loss of income.
To help more people consider whether
protection insurance is right for them, the Financial Conduct
Authority (FCA) will join forces with partners from industry,
government and consumer groups. Actions
include:
-
The Money and Pensions Service and
the Digital Property Market Steering Group will prompt people
to think about protection at key moments - such as becoming a
parent or buying or renting a home. The FCA is also exploring
how other partners can help put protection on people's radar
when it matters most.
-
The Protection Distributors' Group
will lead a consumer awareness campaign, targeted at groups who
are less likely to take out protection
products.
-
The Association of Mortgage
Intermediaries will lead work to help advisers improve how they
discuss protection with their
customers.
The work follows the FCA's Pure
Protection Market Study. The work will focus on groups who
are disproportionately unprotected such as renters, the
self-employed and gig economy workers, those on lower incomes and
people with pre-existing medical
conditions.
Graeme Reynolds, Director of
Competition at the FCA, commented:
Competition in protection insurance
works well for existing customers. But we're working with
partners to increase coverage so that more people are protected
when they or their families need it
most.
The FCA wants to see greater
innovation in this market. It will hold a webinar for firms to
address any misunderstandings about its rules and expectations
that may be seen as barriers. It will also work with the
Association of British Insurers to reduce delays in obtaining
medical records and is inviting firms to take part in
a TechSprint - they
should express their interest by 13 November.
Wider
issues
The FCA has also published findings on
switching, claims experiences, and fair value in the protection
market. Generally it found that competition works well in the
market, but it has reminded firms of requirements and good
practice under the Consumer Duty and its product governance
rules. It isn't planning new market-wide measures, but will take
action where firms fall short of requirements.
Firms should review the examples and
findings in the report and consider whether they need to improve
how they deliver, and evidence, good outcomes for
consumers.
Notes to editors
